Jordan Kobritz

Articles matching tag: Business

“The report of my death was an exaggeration.”
Mark Twain, 1897
For years, polls and pundits have suggested that baseball’s popularity – and economic vitality - is dwindling, especially when compared to football. Based on the most recent estimated MLB franchise values published by Forbes, nothing could be further from the truth.
Thirty years ago 23% of sports fans named baseball as their favorite sport, compared to 24% who chose football. According to the most recent Harris Poll published last year, football trumps baseball by 18 percentage points, 33 percent to 15 percent. However, the poll results only tell one story and the numbers are hardly a reflection of the financial state of MLB.

The lessons I learned from my grandfather have stuck with me. One in particular came to mind when I read the announcement by San Diego Chargers owner Dean Spanos that the team would dessert a loyal fan base in San Diego for Los Angeles.
Maine was once home to a number of smelly, toxic-spewing paper mills. One day as my grandfather and I were traveling through a mill town I made an unflattering comment about the putrid stench. My grandfather opined that the workers in the mill were able to support their families with their hard-earned paychecks and to them, the money didn’t smell. He counseled me that money is money, regardless of where it comes from, a fact that also applies to the Chargers’ move.

The September TV ratings are in and viewership of early season NFL games is down 10% from last year’s numbers. That much is clear. What isn’t as clear is the reason behind the falloff.
Speculation abounds on the cause of the lower ratings. Among the alleged culprits are the National Anthem protests by players, overexposure of the product, lousy matchups, the loss of key players such as Peyton Manning (retired) and Tom Brady (serving a four-game suspension for his alleged role in Deflategate), declining interest in a sport that has been vilified for the toll it extracts on its players, the legal attacks on the fantasy sports industry, and alternative methods of consumption, e.g., streaming video.

A decade ago, when Tiger Woods was the best player in the world, golf looked like a growth industry. Player participation and number of rounds played were increasing, new manufacturers were entering the field and corporate sponsors were clamoring over each other to jump on the bandwagon. But fast forward to today and hardly anyone would recognize the sport.
Golf participation has steadily declined. Corporate investment in the game has shrunk substantially. A number of golf manufacturers have exited the marketplace, the latest being Nike. The world’s largest sports apparel company, with over $30 billion in annual sales, announced earlier this month that it would no longer manufacture golf clubs, balls and bags. However, Nike will continue selling golf footwear and apparel.

Like the federal debt, the cost of attending a Major League Baseball (MLB) game is rising. This season the average increase over last year is 3.7%. That may not seem like a huge increase but in the twelve months preceding the opening of the 2016 season, the inflation rate was a mere 0.9%. Ticket prices alone increased 7.1% last year, almost eight times greater than last year’s inflation rate.
According to Team Marketing Report’s (TMR) annual survey of MLB teams, the Arizona Diamondbacks provide the lowest overall fan cost of any of the 30 teams. That’s not news. This is the tenth consecutive year that Arizona has claimed the title. It all starts with ticket prices and the Diamondbacks have the lowest average season ticket price in the league at $18.53 per ticket. The Major League average is $31.

A 2014 survey of college graduates found that female athletes were more successful post-graduation than their contemporaries who were non-athletes.
The survey of 30,000 college graduates was commissioned by Purdue University President Mitch Daniels and conducted by the Gallup-Purdue Index. The primary goal of the survey was to determine the value of a college education. One key finding of the survey was that being involved with a mentor, a community or a long-term project while in school was important to future success. After the survey was published, the NCAA hired Gallup to dig deeper into the numbers as they related to student-athletes. The results of their work were released last week.

Growing up in the family business – wholesale meat and groceries – I was always looking for ways to improve operations. Every time I made a suggestion my father couldn’t or wouldn’t support, his standard response was “It sounds good.” I learned early on those were his final words on the topic. There was no discussion or explanation. Nor did he ever indicate whether he didn’t like the idea or had tried something similar in the past without success and didn’t want to hurt my feelings.
This brings me to the concept of a la carte cable television, the option to purchase only those channels we want to watch. The cable industry prefers the concept of bundling where we are forced to buy a package of channels, most of which we never watch. It’s frustrating listening to a cable representative explain their offerings, none of which truly mirror our viewing preferences. If it was available, most of us would instinctively choose the a la carte option. But would that result in a lower cable bill? Maybe, or maybe not.

Slowly but surely, fans are forcing sports teams and leagues to add to the limited viewing options they have historically offered us.
In what can only be described as a huge victory for freedom of choice, the NHL and its broadcasters recently settled their portion of a class action lawsuit that has been lingering in the U.S. District Court for several years. MLB, also a defendant in the suit, is now left to singularly defend against allegations that they use blackouts to limit out-of-market games in order to protect local teams’ revenue.

The first week of the NFL’s off-season OTA’s – organized team activities – is in the books. You can be sure that battles for roster spots have already begun. While those battles are important for individual players and may portend the success of individual teams, there’s another contest taking shape in the league boardrooms that involves billions of dollars: The fight for the Los Angeles market.
The NFL abandoned the LA market on two occasions, first when the AFL Chargers left for San Diego after the 1960 season and again in 1995 when both the Rams and Raiders left, the former to St. Louis and the latter to Oakland from whence they had come. The second largest media market in the U.S. has been without professional football for two decades. But that’s all about to change. League sources confirm that the NFL is likely to return to LA as soon as the 2016 season.

“I am in control here.” General Alexander M. Haig, Jr. March 30, 1981
The Los Angeles Dodgers are known for fetching the highest price ever paid for a Major League Baseball franchise, at $2 billion. After going on a front office hiring spree this fall, the Dodgers laid claim to one other record and possibly a third: The highest salary ever awarded a MLB General Manager and having the most current or former General Managers in a team’s employ.
First, the Dodgers kicked their incumbent GM, Ned Colletti, to the curb, creating a new position and assigning him the title of Senior Advisor to the President, Stan Kasten. During Colletti’s nine years as GM, the Dodgers made the playoffs five times. But they never played in a World Series and in sports, the bottom line is winning. Kasten could have fired Colletti but that would have been interpreted as unsentimental and crass for a team with unlimited resources.